The overall goal of our studies is to elucidate the cellular and biochemical mechanism of differentiation of the tracheobronchial epithelium using rat tracheal epithelial (RTE) cells. The tracheobronchial epithelium is composed of basal cells, several types of secretory cells and ciliated cells. The cell turnover in this mucociliary epithelium is normally slow, but even a mild injury will cause rapid proliferation and hyperplasia and excess mucus secretion. Retinoids are key regulators of differentiation o airway epithelium. Vitamin A deficiency leads to increased proliferation and squamous metaplasia. We showed that basal cells as well as secretory cells isolated by flow cytometry have the potential to proliferate and generate the three major cell types. The cells first undergo dedifferentiation to a "PD" (poorly differentiated) phenotype before giving rise to basal, secretory and ciliated cells. These PD cells exhibit markers typical of basal cells. Basal an secretory cells were characterized in terms of their response to inducers and inhibitors of cell proliferation, namely growth factors, retinoic acid (RA) and extra cellular matrix. In serum free medium (SFM) isolated basal cells had approximately a five-fold greater CFE (colony forming efficiency) than secretory cells. Addition of serum increased the CFE of basal cells approx.2-fold and that of secretory cells >4-fold. Transforming growth factor beta1, known to be a growth inhibitor of epithelial cells, equally inhibited the CFE of both cell types. RA, caused a dose-dependent inhibition of CFE in rat tracheal cells but was much less inhibitory to basal than to secretory cells (<40% compared to >80% inhibition). Whether the RA effect is mediated by regulation of TGFbeta secretion is currently being investigated. We showed that RTE cells secrete YGFbeta1 and TGFbeta2, both of which are know to be regulated by RA. Studies are underway to examine the effects of different ECM molecules on basal and secretory cell proliferation. We conclude that basal an secretory cells have similar proliferation and differentiation potential but respond differently to regulators of cell replication.